Groton company fined for violating grain dealer law

September 07, 2007

PIERRE (AP) - A Groton company has been fined $400 for selling millet without a state grain dealers license and ordered to stop selling the grain to a Pennsylvania mushroom grower. The three members of the state Public Utilities Commission said LW Sales, owned by Larry Wheeting, cannot continue to sell millet to a mushroom grower unless the company gets a South Dakota grain dealers license. LW Sales had argued that it was selling the millet legally because the company was licensed to sell seed, and the sales to the mushroom grower were actually sales of seeds. But PUC staff attorney Kara Semmler said LW Sales has sold millet to a mushroom grower 11 times in the past year. The millet is used as a nutrient for growing mushrooms, so it cannot be considered seed, she said. James Mehlhaff, director of the PUC's Grain Warehouse Division, said grain dealers must be licensed and bonded to provide financial protection to farmers who sell grain to those dealers. Neither Wheeting nor his lawyer appeared at the PUC hearing when the commissioners approved the fine and order requiring LW Sales to stop selling to the mushroom grower. Commissioners said the case could be reopened if Wheeting or his lawyer had a good reason, such as a traffic accident, for missing the meeting. Semmler said Wheeting will receive a written notice of the commission's action in the next week. The PUC intends to enforce the fine and order if Wheeting does not have a good reason to reopen the case, she said. In written arguments, Wheeting's lawyer, Kari A. Bartling of Groton, said LW Sales should not be considered a grain dealer under a state law that says no license is needed for occasional sales. Even if the sales to the mushroom company involved grain, the sales were only occasional so LW Sales is not a grain dealer, she said. Millet can be classified as either grain or seed, and the millet sent to the Pennsylvania mushroom grower was sold as seed, Bartling wrote. ''The millet seed became spawn, 'the seed from which the mushrooms ultimately grow,' a necessary part of the reproductive process for mushrooms,'' Bartling wrote. But PUC staff argued that the millet is sterilized so it will not germinate, and it then is used as a nutrient to support the growth of mushrooms. Sterilized millet cannot be planted as seed, so it is grain, the staff said. Semmler said the PUC staff does not necessarily want to stop LW Sales from selling millet to mushroom growers, but the company needs to get a grain dealers license and bonding to protect the farmers who sell grain to LW Sales.